Fiber, Meet DOCSIS4.0 – Cable operators transition to the next technology generation
Cable investors have not only faced operators' broadband subscriber growth evaporating over the past 5 quarters, but also debates over the cost and effectiveness of upgrading Cable operators' hybrid fiber-coax ("HFC") plants to the next generation of network technology, DOCSIS4.0. Douglas Mitchelson and Grant Joslin examine the current state of the DOCSIS ecosystem through interviewing cable industry suppliers and executives, attending industry shows, and touring a large cable operator's Network Operations Center.
While specifics are light from Cable management teams, this industry immersion work suggests that the upgrade will be only about a third as expensive as some investors have feared, within current capital spending budgets, and far below the cost of a full fiber-to-the-home overhaul. Speed and latency performance are far in excess of current application needs and similar to the next generation of fiber networks. Both branches of the standard appear reasonable, and the upgrade path is flexible with several different reasonable stopping points appropriate for different environments.
The DOCSIS4.0 upgrade will leave cable operators with a more performant, more manageable, more reliable, and more efficient network that is fully competitive with fiber. Over the next year, the cost, capability, and benefits of cable's network evolution will become clear, and likely influence investors' long-term views for cable's competitive positioning.